Two former executives of the bankrupt crypto company Cred have pleaded guilty to fraud charges in federal court.
Executives Admit Guilt
Former CEO Daniel Schatt and former CFO Joseph Podulka pleaded guilty to fraud in a San Francisco federal court. They admitted to misleading customers regarding the company's financial health and lending practices, resulting in losses exceeding $150 million.
Legal Consequences for Executives
District Judge William Alsup accepted the plea deals from both executives, setting a sentencing hearing for August 26, 2025. Each faces up to 20 years in prison and $250,000 fines for each count of wire fraud. They are facing 13 charges of wire fraud and money laundering.
Company Overview of Cred
Cred was founded in 2018 and offered high yields to cryptocurrency investors through its ‘CredEarn’ program. However, court documents reveal that Schatt and Podulka falsely assured customers about the safety of their funds, while a significant portion of assets was invested in MoKredit, a Chinese microlender specializing in unsecured loans to gamers.
The plight of Cred underscores the need for transparency and honesty in financial services. The losses incurred by customers raise serious questions about asset management practices in the cryptocurrency sector.
